Today’s Outlook:
• US MARKET:Major U.S. indexes tumbled on Friday after Trump announced plans to impose an additional 100% tariff on all imports from China, along with new export controls on certain U.S.-made software deemed critical to national security. The Dow Jones Industrial Average fell 1.9%, the S&P 500 shed 2.7%, and the NASDAQ Composite slid 3.6%, with technology and chip shares leading declines.
U.S. stock futures rose sharply on Sunday evening, recovering some of last week’s steep losses, after President Donald Trump struck a reassuring tone on trade ties with China, easing fears of an escalating trade war between the world’s two largest economies.
The rebound followed a sharp sell-off on Friday when Wall Street suffered its worst single-day decline in six months. Trump’s announcement came after Beijing moved to further tighten its rules for rare earths exports. It jolted markets already wary of renewed trade hostilities.
But on Sunday evening, Trump appeared to walk back the tone of confrontation, posting on social media, “Don’t worry about China, it will all be fine.” He added that “the U.S.A. wants to help China, not hurt it”, hinting negotiations could continue. The comments appeared to soothe investor nerves and fuel bargain-hunting in futures trading, though sentiment remained fragile. Still, the optimism was tempered by a prolonged U.S. government shutdown that entered its second week with no clear path to resolution. It has halted the release of key economic reports from federal agencies, leaving the Federal Reserve with a thinning data set to inform its October 28–29 meeting. Meanwhile, earnings season will begin this week, led by major U.S. banks.
• EUROPEAN MARKET: The pan-European Stoxx 600 declined 1.2%, while the FTSE 100 index in the United Kingdom dropped 0.9% and the DAX in Germany fell 1.7%. The CAC 40 in France, meanwhile, tumbled 1.5%.
European stocks closed lower on Friday, as investors gauged developments in France’s ongoing political crisis and reacted to a Truth Social post from U.S. President Trump late in the day, threatening a “massive increase of Tariffs on Chinese products coming into the United States of America.”
French President Emmanuel Macron has set a deadline for today to name his sixth pick for Prime Minister in just under two years, following the collapse of a previous government under previous — and short-lived — premier Sebastien Lecornu. Bank of France Governor Francois Villeroy de Galhau warned that the upheaval will likely cost France — Europe’s second-largest economy — at least 0.2 percentage points of growth and could increasingly sap both business and consumer confidence.
•ASIAN MARKET:China stocks are set to come under pressure on Monday as the renewed trade war between Washington and Beijing hits risk appetite and spurs profit-taking in a share market hovering near its highest level in a decade. However, investors and analysts expect the sell-off to be less severe than the panic-selling seen in April, when U.S. President Donald Trump kicked off a global tariff war. Bond prices are expected to rise on Monday. Trump on Friday unveiled additional levies of 100% on China’s U.S.-bound exports, along with new export controls on critical software by November 1, in a reprisal against China curbing its critical rare earth exports.
• COMMODITIES:Brent and U.S. crude futures fell more than USD 2 a barrel, or more than 3%, on Friday as U.S. President Donald Trump’s threat to impose increased tariffs on China cast a shadow over the demand outlook in a market seen as oversupplied. Brent crude futures settled at USD 62.73 a barrel, down USD 2.49, or 3.82%, the lowest since May 7. U.S. West Texas Intermediate crude finished at USD 58.90 a barrel down USD 2.61, or 4.24%, the lowest since early May.
• INDONESIA: The JCI closed flat at +0.08%, finishing in the green at 8257.86. Keep an eye on banking stocks, especially if they start to reach their oversold support areas, as current valuations appear quite attractive for accumulation. For a more aggressive approach, watch the momentum and rotation among conglomerate stocks and those with strong, prospective narratives, as some of them may continue their upward trends. However, continue to closely monitor conglomerate stocks in your portfolio — if they start to break below the 20-day moving average (MA20), it’s advisable to reduce position weights. If there’s an extended pullback in gold-related commodity stocks, they could be considered for short-term trading opportunities, especially when signs of weakening appear.
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